McDonald’s International Lead Market’s Revenue Neck To Neck With Revenue From US Market?
McDonald’s (NYSE: MCD), whose stock currently trades at around $212, generates its revenue primarily from its US Market which is projected to account for 37% of total revenues in 2019, while the International Lead Markets are expected to contribute 36% to the top line. In this note we discuss the revenue segments of McDonald’s, their historical performance, and expected Total Revenue for 2019. You can look at our interactive dashboard analysis ~ McDonald’s Revenues: How does McDonald’s make money? ~ for more details. In addition, here is more Consumer Discretionary data.
McDonald’s Business Model:
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What Does McDonald’s offer?
- The Company operates and franchises McDonald’s restaurants, which serve a locally-relevant menu of quality food and beverages in more than 100 countries. McDonald’s franchised restaurants are owned and operated under one of the following structures – conventional franchise, developmental license, or affiliate.
- The Company is primarily a franchisor, and on 31st December 2018 approximately 93% of McDonald’s restaurants were owned and operated by independent franchisees. Franchising enables an individual to be his or her own employer and maintain control over all employment related matters, marketing, and pricing decisions, while also benefiting from the strength of McDonald’s global brand, operating system, and financial resources.
Operating Segments:
- U.S.: The Company’s first and largest segment. It covers all the company owned and franchised restaurants across the country.
- International Lead Markets: The segment includes established markets like Australia, Canada, France, Germany, the U.K., and related markets.
- High Growth Markets: The segment includes markets that the Company believes have relatively higher restaurant expansion and franchising potential including China, Italy, Korea, the Netherlands, Poland, Russia, Spain, Switzerland, and related markets.
- Foundation Markets & Corporate: The segment includes the remaining markets in the McDonald’s system, most of which operate under a largely franchised model. Corporate activities are also reported within this segment.
What Are The Alternatives?
- Major competitors are companies like Burger King, KFC, Subway, and other fast food chains.
What Is The Basis of Competition?
- McDonald’s restaurants compete with international, national, regional, and local retailers of food products. The Company competes on the basis of price, convenience, service, menu variety, and product quality in a highly fragmented global restaurant industry.
- The Company’s primary competition are quick-service eating establishments, casual dining full-service restaurants, street stalls or kiosks, cafés, 100% home delivery/takeaway providers, specialist coffee shops, self-service cafeterias, and juice/smoothie bars.
Revenue growth expected in 2019 primarily from improvement in US Market and International Lead Markets. For detailed information regarding change in Company owned and Franchise stores as per Market please visit our interactive dashboard – McDonald’s Revenues
- Total Revenue has fallen by 7.9% from $22.8 billion in 2017 to $21 billion in 2018, and is expected to recover by 2.4% to around $21.5 billion in 2019.
- McD’s US Revenue has fallen by 4.2% from $8 billion in 2017 to $7.7 billion in 2018, and is expected to recover by 5.11% to around $8.1 billion in 2019.
- International Lead Market’s Revenue has improved by 3.5% from $7.3 billion in 2017 to $7.6 billion in 2018, and is expected to increase further by 2.2% to around $7.8 billion in 2019.
- High Growth Market’s Revenue fell by 27.9% from $5.5 billion in 2017 to $4 billion in 2018, and is expected to remain nearly flat at around $4 billion in 2019.
- Foundation Market’s Revenue fell by 8.8% from $1.9 billion in 2017 to $1.8 billion in 2018, and is expected to further fall by 4.6% to around $1.7 billion in 2019.
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